We Understand Construction

Or are we just another group of egg-headed unwitting accountants that work in a nice clean office and have never stepped foot on a construction site let alone seen a framing hammer or a flat shovel, let alone knowing where the start button is? Hint: there is no start button…

When construction company owners contact us the second thing they ask is how much will it cost to have us clean up QuickBooks and take over their bookkeeping.

Sharie and I have owned and operated several construction firms so we understand the multiple layers of the question. It is a complex, thick, deep and wide like a giant, moist layer cake with a thick slathering of frosting.

Let’s open up that cake and examine the multiple layers. This post will cover the first two layers with the rest to follow in subsequent postings.

I grew up in a construction family and worked in the family business from the time I was 10 years old through college and a good number of years beyond that.  In fact I became certified as a Journeyman Plumber in Washington State in 1981.

We Understand Construction Accounting

Or do we treat all accounting as the same. Accounting breaks down into three general areas:

1.   Largest Group - Retail Accounting: Retail stores, butchers, bakers, candlestick makers, doctors, lawyers, auto mechanics, service businesses and thousands of other similar businesses.  Customers go to the business to get goods and services.

2.   Medium Group – Construction Accounting: Home builders, general contractors, commercial contractors, plumbers, electricians, HVAC companies, handymen, road bridge and highway builders, remodel contractors and several other similar businesses. The business goes to the customers to provide goods and services.

3.   Small Group – Manufacturing Accounting: Boeing, Ford, GM any business that converts raw materials into a finished product. The business ships goods and services to their customers.

Since Retail Accounting makes up the majority of all businesses all colleges and universities focus on preparing students to work in these types of companies. In fact to the students are prepared to work within divisions of large firms. 

A lot of bookkeepers and accountants spend entire careers in billing, invoicing, reconciliations or some other specialty and never really understand the entire accounting system. Others spent years in related financail services such as the insurance industry as agents, staff or underwriters and in the banking industry as loan officers or bank tellers. 

This is why a lot of construction firm owners get frustrated when talking with most accountants is because they do not understand construction bookkeeping and accounting. 

Stay tuned for our next posting which will cover the third and fourth layers.

Warm Regards,

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